City Council — 2022-04-12

Mayor Stix, here. Mayor Pro Tem Haney?

I'm over here.

Council Member Blatz is here. Council Member Francina is here and Council Member Weyrich.

I'm here.

commission report from Brian Akins for the Historic Preservation Commission. Thank you, Brian.

Hello Mayor, hello Council, hello everyone else. I'm Brian Akins, I'm the Chair of the Historic Preservation Commission. That's the hat on that I have at the moment. You'll see me later with a different one. I would just like to report that the Historic Preservation Commission called a special meeting on February 28th. That was to address the two options that were being proposed for the Al Robler Hotel We met for two hours on that, seemed like a long time there until last week's meeting with the Planning Commission. And I actually came to a unanimous decision to go with option number one and so after listening to multiple sides, after listening to staff and professional people And what it was, was it was not a motion. This was different.

Usually we get together for landmarking and make a recommendation to you. In this case, we were only sharing our opinions and our individual recommendations. So it wasn't a recommendation from the Historic Preservation Commission. It was a recommendation from each of the commissioners themselves to the Planning Commission which they could then adopt or they could change their mind.

Last Wednesday, April 6th, I as a representative of the Historic Preservation Commission attended the planning commission for four and a half hours. And it was very interesting. I do want to thank Mayor Sticks who is our liaison for this last quarter for hanging in for some very long highly technical very involved conversations that would have put a normal human being to sleep. And probably did online. But anyway, thank you all very much.

Mayor I have a

question. Yeah just want to say thank you Brian so much and it was a pleasure watching your work. You're all so professional and it's fascinating. Thank you.

I'm not sure if this is the city attorney or to Brian but We held up the bringing to planning, the old Robler Hotel waiting for your – it wasn't – so like you said, it wasn't Lawful it wasn't in any ordinance. It wasn't in any policy you just met to give them the five Commission members that your thoughts on what they should do to move forward and I so, I don't know who this goes to but How did how did how was that created that we could hold up a project without some formal And I'm not accusing anyone of any, I'm just saying without some formal recommendation coming forward. If it was just a discussion why?

So our code does provide for the HBC to review and comment on but not approve any historic resource report prepared for any project. So the code contemplates HBC having a review and comment session but not approval And that's why we had the review and comment session, but not approval.

Thank you.

So it was within the code and then it was done... I

just needed to understand it better. After listening to what you just said, I just went well if all you were doing were giving it a yay or nay up and down, it was like why did we spend so much time holding this project up when that might have been done sooner than later other than I think we were waiting for the report?

Yeah, there are a lot of things that we were waiting for. We had made a recommendation to the applicants clear back at the end of last summer when the Caltrans report came out even before the Caltrans report. We had in our mind thought that there was a historic component and it needed a historic resource report and so I had actually made that recommendation to go to the city ask for a historic resource report at that time That wasn't heated.

So in lieu of that, I had told the applicants and alerted Steve Quillacy that as soon as that new historic resources report came about, that we would hold an emergency Historic Resources Commission meeting. And we did that just as soon as we got that report on February 28th.

Thank you, Brian.

You're

welcome.

Thank you, Brian.

And Mayor I just had one follow-up question so this state report how does that it seems like it may impact a lot of projects moving forward is it necessary? Is there anything in it that says that the downtown now is historic? You know why are we allowing the state to interfere with city business

So it's not on tonight's agenda, so I can only give a brief comment and then we can have a discussion about it. The brief comment is repeating what was said at the prior meeting. The state in their wisdom determined that the downtown is a downtown historic district for CEQA purposes. So any project that comes through that's within the district that is subject to CEQAs has to assess whether it will or will not impact the historic character of that downtown.

And in this case, the hotel was subject to CEQA at that size. So we had to assess it and then we ended up going through with an exemption once it was determined not to have an impact. The council could look at some strategies to minimize that impact upon the other projects, and I would recommend if that's the desire we do that as a future agenda item in another meeting.

May I comment on that? Can you bring it back to the

chair? Yeah, can I do a follow-up? It's real simple. It seems like the word CEQA is what's going to generate what actions that we have to take,

correct? Yes, and we could for example look at local CEQA thresholds to adjust the impact of that. Okay,

thank you. Thank you Mayor. My very short comment is that's already on a future agenda item. Right, that it is. For this council to take up CEQAs thresholds within the range of local discretion which is another reason why we need to do it. Thank You Bill. Thank You Mayor.

Sure, thank you Matt. All right well move on report out from City Attorney for the March 28th closed session

Thank you, Mayor. At the March 28th 2022 City Council closed session, the council met to consider the Ventura water litigation and took one reportable action which was to unanimously decide to move forward with a city request to join the Upper Ventura River Groundwater Agency, a groundwater sustainability agency that's a joint powers agency that covers about a quarter of the city roughly the Y West as distinct from the rest of the city which is in Ojai Basin Groundwater Management Agency, which the city's already a part of. Now the city is going to request joining Upper Ventura River Groundwater Agency and it will, it's joining the JPA so it'll go through a process that'll come back to council for formal approval but council did provide the direction to move forward.

Thank you.

Thank you. All right just a quick reminder about meeting protocols. One of the jobs of the mayor is to facilitate the meeting and make sure we get through the city's business in an effective way. We are asking everyone to follow these rules Please raise your hand and wait to be called on, no crosstalk. Please bring it back to the chair and Council Member Blatz and Francina if you could use the raised hand icon please be brief and to the point stay on topic and please refrain from comment or deliberative discussion on an agenda item until after we have heard from all members of the public When you want to ask a staff member a question, please avoid turning your question into a comment. Please write down your comments and share them after we've heard from the public.

Please use respectful language and a civil tone and volume. Note on the volume, we need peace and calm to make good decisions. So if a voice is raised, we'll stop until the volume drops. When you're out of order I'm going to use the gavel. So thank you very much for your cooperation. Mayor. Yes, go ahead.

Can we all get a copy of that?

Yeah I was gonna...I want a copy of that.

Of course yeah

happy to share. It feels like it needs a little tweaking here and there

Okay, we'll move on to public communication

Madam Mayor before we go to public comment. Did we formally approve the agenda?

Yes,

okay Thank you. I missed that in there.

Yeah

Thank you

Okay We'll move on to public communication and just a reminder These are items not on the agenda and because they're not on the agenda. We cannot discuss them when you make a comment We're not ignoring you. We appreciate your viewpoint and participation We can agendize for the future normally public comment is three minutes if there are more than 25 comments And they're certainly or not tonight. So don't worry I will be asking the council to reduce the time to two minutes in the sense of fairness and efficiency Please stop talking when the time is up and model civility and respect no giving away time to another speaker No yelling, name calling or swearing. We're doing our best to run an efficient and a productive meeting so thank you very much for your understanding and participation.

So we'll begin with Jeffrey Starkweather then Bill Miley and then Wendy Larner.

Good evening Mayor, City Council members, staff. Hopefully there's some public. I'm here as actually representative as the president of the Ojai Valley Democratic Club and I just want to...I've already invited the city council directly but I want invite everybody else and the public Because we are going to have our new congressman Salud Carbajal here in town on the 24th at the home of Dulaney and Doug Labar, 206 South Blanche Street from two to three.

And one of the reasons I'm announcing it is because, and you've gotten the press release here, I'm a member of the Sierra Club, and I happened to get my newsletter. And there it was, this endorsement not only of Salud but of Julia Brownlee, our former congressman who actually is part of Ojai. She's the upper Ojai. This was one of the most effusive endorsements I've ever read. I just wanted to read real quickly just two paragraphs.

The Sierra Club said Representative Carbaugh understands the urgency of the climate crisis and highlighted his record as a member of the Climate Solutions Caucus and the Climate and Environmental Justice Congressional Task Force. He introduced bills to help local communities improve resiliency and adaptability of water-related infrastructure and encourage renewable energy, and he has championed efforts to strengthen Water Resiliency and Designate Los Padres as a Protected Wilderness.

As I wrote in this press release, we were especially pleased because Carbajal combines both climate solutions and social justice. And we believe that's what most of our residents of our valley desire for so all residents and future generations can equally enjoy the beauty and outdoor treasures of Ojai. I would add one more thing, so this is a chance for you to talk to him. This is gonna last two hours. He's gonna only speak for like 10 minutes that take questions, so there'll be plenty of time to talk to him.

Remember now that starting a year ago we had I forgot what they're called now. Pork barrel, but I can't think of the right word. Airmarks, sorry sir. So attached to the budget don't let the congressman say I said that. Attached to the budget are air marks and I looked at his Santa Barbara website, and he had given a lot of earmarks to important programs. So that's something that we in Ojai, since we're only Ojai and Ventura in his district, we should take advantage of this, come out and show our support, and see if we can get some more support for our congressmen not only in the environment but a lot of other issues. Thank you.

Thank You Jeffrey. Next we have Bill Miley and then Wendy Larner

Good evening. For the record, my name is Bill Miley and I've lived here since 1968. At the April 7th Park and Recreation Commission last week, I spoke on the pickleball play issue with constructive comments about the potential for Soule Park as a pickleball center. I already have yellow? No, okay. And the value of the pickleball activity for preventing folks especially older folks from falls and early chronic injuries and deaths.

Also at the meeting, Tim Kraut, Ojai Pickleball Incorporated and a pickleball ambassador spoke of the number of pickleball folks playing during the month of March. Just during the weekdays there were 23 weekdays and there were 709 individuals who played during the month in those 23 days. The number gave me a new grander insight on the value of pickleball for all, especially seniors.

Since falling injuries are a major health issue as well as cost, the more folks who play pickleball in my opinion, the less falls, the less medical and other costs, more seniors are able to have good quality of life as they age and are able to age in their homes. The healthier large groups of folks will be, so a very valuable public health medical health primary prevention intervention is what I'm talking about. So I hope you'll agree with me that the preventive benefits of Pickleball can be should be A big selling point for county government to agree to developing a Pickleball Center at Soule Park.

It would meet the criteria currently not met by having pickleball play in a close urban area, and especially it would mitigate the pickleball play repetitive impact noise production. So preventing falls and improving quality of life is a grand goal, and I hope you'll go with that. Thanks!

Thank you, Bill. Next we have Wendy Larner and that will be the last public comment.

Good evening. Thank you for the opportunity to speak my subject tonight concerns discussion item two from the March 22nd meeting and the action that was taken during that meeting to form an ad hoc committee for the further review of the Reach Code ordinance Because of time restraints, I did not have the opportunity to complete my statement that night. My closing remark was to be please council do not out of hubris and the desire to be the first in Ventura County to do something make rash decisions.

It's really important to know, understand and reason through how our electricity is generated at origination sites. The availability of adequate green energy, the cost in economic well-being of all the people, price incentives and rebates are not free, someone pays and they are not permanent. Consider too the environmental costs of these alternative sources as well.

It is so important that a bundle of unintended and perhaps irreversible negative consequences are not created by your decisions. Now to my point tonight, I very much appreciate your desire to carefully consider the issues raised in council discussion and public comments at the last meeting I'm pleased to be here today. You already have the benefit of their input.

For that reason, and a fact that the original committee was contrary to protocol given three extensions I think members of that committee should not be on the newly formed Ad Hoc Committee. I also suggest that good governance and stewardship of the people's civil rights require that you research and consider the input of excellent, credentialed, unbiased by grants scientists in many related fields as well as economics, agronomics, statisticians and the learned from other disciplines who may disagree but do have things to say about this issue that may disagree that there is an existential climate emergency or may agree that there is but disagree on what can sensibly be done about it.

Those of us in Ojai who have the ability to read and research, exercise logic, apply common sense but do not have expertise in any of the related fields may not be equipped to make the best case. But we can certainly provide or point you to a wealth of quality information.

Thank you, Wendy. Time's up. Much appreciated. All right we will move on to the consent calendar a motion to approve. Mayor. Oh yeah oh I'm sorry

anybody on Zoom? I'll ask if anyone in the zoom queue would like to comment on public communications please use the raise hand function now and I'll call on you No one's raising their hand. Okay,

thank you. All right move to approve the consent calendar?

Move to approve it items A through H on the consent calendar. Second.

That is everything okay roll call please Gail.

Mayor, can I add something to that comment too? And as much as we appreciate what Pam and James have done, we should also reach out to the community and say thank you for staying with us and supporting us and giving us money that those two could manage. Without that they wouldn't have been managing anything. Took us all.

So we have a presentation.

Yes and with us being back in chambers we're trying our hand at a different technology. Let me see if it's going to work. Give me one second. We have a presentation will try to keep brief but let me see. OK I think that's why. All right I think this will work so it's not perfect but Okay, so we have a presentation we'll try to keep fairly brief. I think the big thing with this first budget workshop particularly this year and after the last couple years is kind of just understanding where we're at from a big picture perspective. The last couple years have been kind of almost like a rubber band effect where we've talked about and this slide shows Our revenues kind of bouncing around, going up or down. And then as we kind of looked back at the last five years, we realized that even five years ago what we call the last pre-COVID year of 2018 to 2019, we were still recovering from the Thomas fire so you really haven't had a regular quote unquote budget year for longer than five years really.

So we wanted to start with tonight looking kind of big picture. What's it looking like? What are we expecting? And I think the positive that you could see right off the top, looking at our first slide showing revenues is we have seen this year that revenues have increased to the highest level in four plus years and we're expecting that trend to continue and we've seen it getting stronger as the year goes So as you can see in the chart, the first year of COVID our city revenues had dropped to $10.2 million that increased to 11.3 the second year by the end of June we expect this year to be closer to 12.3 so basically a million dollars year over year over those three years and we're expecting or we're proposing in our budget for next year that our revenues will be 13.1 million dollars And so that is pretty substantial growth.

It also does show how much of an impact the city faced those first two years especially of COVID where the revenues had dropped 2 to $3 million, respectively each year. The big question you may ask at that point is what assumptions are we making to come to that conclusion, that revenues will keep growing to about $13.1 million? So this slide lists some of the basics.

We're assuming that the recovery continues from the pandemic and that there's no further business closures. If there were any business closures, we would expect the revenues to not meet projections But we at this point looking forward, we don't anticipate that happening. We also only assume the current hotels are open obviously last week we had the hearing for the El Roblar Hotel.

The operators at that meeting stated that they anticipate it will be about 16 months. To get reopened. So this budget does not include any revenues from the reopening of that hotel or any additional hotels from what we currently have. For cannabis tax, which will talk a little bit more about later on tonight. We're assuming that the existing vendors continue to operate the three dispensaries We are kind of backing out the manufacturing revenue, which we had anticipated receiving this year as we're hearing more that those manufacturing businesses are not getting moving as quickly as we had thought that they would.

So it assumes that three dispensaries remain open with no additional manufacturing sites at this time. We also assume the continued trend of cable franchise fees to keep reducing as more people move away from cable and towards online subscription. That impacts our revenues to some extent. We also do not include any potential new businesses, there's another business that's going to the HPC Thursday I think which is the Playhouse Theater for example We don't anticipate any revenues from those businesses yet, just because the timeline's not certain yet of when they will open and begin operations.

And we also don't propose any major changes to current operations. I know we've talked about some potential ideas such as the Soule Park Partnership. Those are not included in the first round of the budget but it's something based on feedback from council that we can look at. And then finally, the budget reinstates the transfer to the CIP from our TOT, our hotel tax. But at a 10% level we had eliminated that the last couple years due to budget challenges but we're proposing reinstating that in this year's budget and so that's reflected in the proposed budget as well.

And I'll go through these, I'll try to go through these fairly quickly and then take questions towards the end. Up front when we're talking revenues, I think that the important thing for us to look at are what we call the big three revenues and we have a fourth there but the fourth one is not to the same level as the big three but it's an important topic so the Big Three Revenues for the City of Ojai are the hotel tax, otherwise known as the transient occupancy tax.

The sales tax and the property tax. And what I think this chart shows that we're pulling up on screen here is there is a perception, I think, that the economy's really recovering and that, you know, we're seeing more people in Ojai and more people shopping and things like that. One thing looking at these trends that's interesting is that sales tax is fairly flat. Property tax is growing a little bit at a time, which makes sense because the city gets just a small portion of property tax so it doesn't grow very fast and so the one tax that really increases dramatically and has been driving the growth in our revenues is the hotel tax Which increased from 3.5 million dollars in revenue and 20 to 21 to 4.4 million this year and we're projecting to increase further to four point six million next year those revenues also have kind of a doubling effect not quite doubling effect but because of Measure C as those revenues grow we also get that additional 5 percent towards CIP projects So that revenue is very important because even this year if we're projecting 4.4 million for example, that means that we'd also be projecting $2.2 million in Measure C revenues which is something that did not exist prior to 2020 so.

That's where we're seeing the most growth. That's where we're seeing the most impact and that's where we also get that double benefit of Measure C. So looking at those, when we look at our revenues and we see that the revenues have grown by a million dollars over the last couple years. What you can see looking at these revenues is that it's the hotel tax which is driving that increase. And we expect that to continue into next year.

Last on this slide, again not one of the big threes but we thought it was worth talking a little bit about, but the cannabis tax over three years. The first year when it was just implemented for part of the year we received about $188,000 in revenue which had ended up being about $30,000 a month That pretty much continued for 21 to 22. We're a little bit lower than projected, but we're at about $320,000. We had thought that we'd get closer to $400,000, but that was when we thought the manufacturing businesses would be operating. And so next year we're showing 300,000 in revenue which is actually a slight decrease.

And I think what the reason why Pam and I talked about that one quite a bit and I think that the real reason there is just all the cities around us are seeing this from the increased competition on cannabis tax that the tax revenues are starting to either kind of top out or even start to revert a little bit. So we show in our next budget that number going from the $320,000 this year to $300,000 next year.

And also for the first time in this budget we show that those cannabis tax revenues go straight transferred into the reserve per the City Council's adopted policy so every dime of cannabis tax will immediately move into our city's emergency reserves. And I'll try to keep these brief, right? I'm going long on these. The next slide we show the city's revenues kind of taking a step back. The slide before looked at tax revenues in particular. This slide shows kind of the major revenue categories.

We highlighted three things. One was the tax revenues, which show what we just spoke about a minute ago. Those are increasing but it's basically increasing by the amount that the hotel tax increases so that's really the only place we're seeing growth at this point. The other thing we highlighted in this chart is the recreation programming, which you can see how severely impacted that was from pre-COVID. We had about $600,000 in revenue to during COVID dropping to as low as $140,000, which obviously it's hard to run rec programming when people are being told to stay at home and not congregate or things like that. So we are we are seeing that bounce back up to about two hundred and seventy thousand dollars. And next year we're anticipating growing that a little bit more by adding some senior programming that we're working on so that'll that's an area where there's a big swing but I think we're projecting fairly optimistic.

And then the last box that we highlight on this chart is the COVID funding assistance the American Rescue Plan Act funding We are anticipating that we will receive, we've received one but we're anticipating a second payment of $893,000 in the COVID funding. And so those are shown here but we wanted to separate that out because it would make it look like the city's revenues grew when they really didn't grow. It was just that we're receiving these one-time COVID funding payments.

We just wanted to call that out and explain that a little bit more. So we are expecting to receive the second payment shortly of that, so we'll have those two American Rescue Plan Act payments. So revenues, that's really the big picture in revenues. Again we're seeing steady growth mostly from the hotel industry and we're projecting increasing from the $12.2 million level to the $13.1 million level next year.

And I would say it's fairly conservative, but Pam and I always try to keep in mind that our city's adopted financial policy is to budget conservatively. So I think we're in line with a conservative realistic estimate of next year's revenue. So now that we've talked revenue, we wanted to talk a little bit about the expenditures that we show in this budget. And so I'll go through these very briefly and some of these are hit on a couple slides so I won't get too detailed but Really the big picture for this year's budget is with that increase in revenue, focusing on catching up on deferred maintenance. Key projects like making sure to fund key projects.

Prepaying the debts like the pension related costs that have a compounding effect by prepaying them Rebuilding reserves and rebuilding staffing levels. And so I think those are really the five key areas that as we talk about the different expenses in the budget, every expense really falls into one of those categories. One of the first things we are proposing is increasing all of the budgets for maintenance, for facilities, parks, streets and trees.

And that increase in the budget proposed is about $150,000 for those categories. And that's in the general fund but some of those costs are also reflected in the capital improvement project budget which will be the second workshop. So we're proposing increasing it here, but we're also proposing utilizing some of the different Measure C funds and things like that for some of these projects too. A big emphasis on catching up on deferred maintenance.

We're also proposing reinstating the prepayment of the retiree medical payment, the $100,000 prepayment that we had done for I believe it was four or five years at this point. And so we're proposing reinstating that. Some of these things had been cut only like when we were really trying to cut the budget during the worst of the pandemic. So this budget reflects a lot of those things being added back in at this point.

The budget also includes the largest contingency fund budget to date, $450,000. We've had a contingency fund for about three years. It's been about 100 to 200 thousand dollars and we've used it each year and I think next year looking forward with some of the litigation issues and things like that, the water litigation and some of these other projects, we are expecting to have the need for the largest contingency which will allow us to fund unanticipated projects. So this budget includes $450,000 for that.

It also includes enhanced code enforcement services expanding on what we had done the most last year and this kind of builds up on that a little bit more And then it also includes rebuilding the staff levels by filling the remaining vacancies. We still have a few vacancies left from when we froze some positions, and also adding two additional maintenance workers And I want to explain that quickly because we in the budget are and I'm sorry in the packet today. We had a consent item That talked a little bit about my oh, hi, and I just wanted to talk a little bit about that quickly we don't want to have it be its own full discussion item but it the impacts of the my Ojai application are Trying we're trying to make sure we budget for those To help offset some of those things in the budget And so just quickly, the My Ojai application was the smartphone application that we launched 11 months ago.

We're coming up on the one-year anniversary and that's the smartphone application that allows residents to take a photo with their smartphone report an issue and have the location and everything tagged on the smartphone And so to date we've had 1,205 downloads of that application which far exceeds expectations. When we first got that application we asked the software developers for a city our size how many people would they expect to download the app and they said about 300 and so I told them it would be 10 times that I told them it would be ten times that. We're not quite there, but we're at about four times that at this point. And so one of the nice things about that app is not only can people report issues quickly, but we can also print reports very quickly and so using that app we were able to look at all the requests so far and there have been 604 service requests in the first 11 months And related to one of the items later tonight, 59 of those were for gas-powered landscape equipment.

We just see here the evidence shows that that is the highest demand right now for service according to our MyOhai application. And so 59 of those 382 complaints were for gas-powered landscape equipment, the other big categories were noise issues, RV parking, tree trimming, commercial filming without permits Zoning violations, and then early during the pandemic we were getting a lot of COVID-19 compliance related complaints.

So again all of those are reasons why additional code enforcement would be a priority, a recommended priority. And then the second biggest category is 190 for public works. The bulk of them are potholes which we've also I think done pretty well at getting those filled fairly quickly And so we've had potholes, parks issues such as playground equipment issues, sprinklers issues, trash issues and then sidewalk repairs and trash in the city right away. Those are the big categories for Public Works.

And so one of our recommendations is to include some Public Works maintenance worker positions so that we can create kind of just like a pothole crew that can work on those Also with paving being the big project plan to this year being able to work and coordinate with the paving so And then we received 32 other issues. So across all the other departments 32, so it's very clear that the big Demand is code compliance in public works. So that's where we're proposing to use some funding for additional staffing I And there is a report kind of on that in the consent packet, but we just wanted to call that out as a little bit of the explanation.

Regarding the expenditures, so what we propose is essentially a balanced budget at this point. This is a first draft, so we expect to get feedback and we'll bring back changes. But with the start it's fairly balanced. It's about a $40,000 deficit Which we can balance, but we wanted to start with the realistic picture. Now I wanted just to have this slide it just speaks a little bit too...

Obviously the first question I would ask is last year we were at $11 million dollars, this year we're at $13 million dollars. Why the two million dollar increase? Have we gone on a spending spree? And I think it's actually the opposite is that the last couple of years we went on a cutting spree and this year we're trying to start adding things back in, restoring service levels and public works and code enforcement. That's a chunk of about $700,000.

Increasing our contingency fund, increasing rec programming, and then an increase in our insurance costs And an expected 5% increase in our sheriff's costs. That's another chunk under the departmental operating expenses of about $500,000 in increases and then reinstating all the transfers that we deferred during the pandemic Because in the pandemic is very easy to say let's just not transfer money to CIP this year. Let's not transfer money for equipment or vehicle replacement, but if we are going to want to start replacing equipment and vehicle and even you know we had talked about electrifying our fleet and things like that. At some point, we need to start putting some money into those accounts to do that. So that's included in this budget with about a $700,000 increase as well.

Between those three categories you can see about two million dollars in increases. Those are the bulk of the increased expenditures this year. And we have that in more detail. I won't go through that unless there's questions, but so at the end of our first workshop kind of from a big picture perspective what we're looking at is about a $13.1 million in revenue that's anticipated and $13 .14 million in expenditures for right now a shortage of about $40,000 again, I would say that's pretty much a balanced budget In the scheme of things.

And so what we, and then the positive you can see from this slide is that over the last two years because of the reductions we made and then over time that recovery, we actually are looking at those two years rebuilding our reserve by ending up 21-22 and 20 to 21 with surpluses for each of those years. It puts us back to where we're at now, which is we've rebuilt the reserve. We're actually slightly higher than when the pandemic started. I think we're close to about $4.7 million in reserve right now.

But if we adopt a budget of $13 million because our goal is a 50 percent reserve, our reserve goal would be about six and a half million dollars so we'd still have some work to do to meet that goal. So that's our proposed budget at this point. A couple of quick points and this is more to kind of prep for or just start thinking about for the next council meeting, the next budget workshop is going to be Measure C and CIP.

And so we just wanted to give a little bit of an overview of the revenue that we expect for Measure C that we will be able to use towards projects I mentioned earlier that now hotel tax, when we used to get a dollar and now we get $1.50 with Measure C. And so when we look at next year and it's the record hotel tax of 4.6 million dollars is what we're expecting. That also means 2.3 million dollars in Measure C So you can see from this chart that by the end of next year, we'll anticipate having about six million dollars of Measure C. Some of that's been used for projects and so when we go over the Measure C budget will show what's been done to date and what's still planned for today planned for the next year from some of the projects they had carried over but there will be some additional funding for the council to identify some more priority projects at the next workshop.

So that that's coming up the next meeting And so we broke it down to there's like five general areas that we wanted to get feedback on but of course, we're happy to take any questions and Walk through it. But really the five general questions The first one is the big one to me which is the general feedback from Council if this budget at 13 million dollars is realistic optimistic aggressive or conservative.

And we think it's conservative realistic, I think is what we would say but I think one of the points we want to make like we said in the last five years we've had the Thomas fire and the pandemic so you know we think that it's paid off to be conservative over the last few years and I think that's a good place to be So that's kind of the first general question. Second, we recommend reinstating the TOT to the CIP transfer, the Transfer of Hotel Tax for Capital Improvement Projects but we're recommending it at a reduced 10% level this year. The idea being that we had cut it for a few years so it's time to start getting back into doing that But with Measure C, I think that we will have to look at that policy because I don't know that a 20% transfer is needed anymore.

We just we have other funds now that can be used for those which will free up some general fund money that could be used for priorities. Third, the contingency fund. We noted that $450,000 is included which is the highest level to date but there's a question of if that's adequate? We have so many things going on and the water litigation is one example that can utilize those funds very quickly. So we wrestled with having more at some points and at some points trying to pull it back.

Fourth, which will also be a topic at the next meeting is that right now in the budget $103,000 is included in community funding. That was $204,000 this and this year's current budget so $103,000 would be a reduction. So I anticipate that the council want to talk about that and identify what level of funding we'll need for community funding And then last, we are going to bring this back to Budget Committee and discuss it a little bit more. But we were looking at as the budget recovers prepaying some other unfunded liabilities like pension costs and prepaying those to reduce long-term costs of those items.